United Kingdom VAT & Duties Tribunals (Excise) Decisions

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Cite as: [2002] UKVAT(Excise) E368, [2002] UKVAT(Excise) E00368

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Bence v Revenue & Customs [2002] UKVAT(Excise) E00368 (13 November 2002)

E00368

Non-restoration of motor vehicle – Reasonableness of decision – Mistake of fact – Whether it was reasonable to proceed as if there had been no mistake of fact – Appeal allowed

LONDON TRIBUNAL CENTRE

ROBERT JAMES BENCE Appellant

- and -

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: MR PAUL HEIM CMG (Chairman)

MR M M SILBERT FRICS

MR BERNARD J COODE FFA

Sitting in public in London on 27 June 2002

The Appellant in person

Mr Jeremy Hyam, counsel, instructed by the Solicitor for the Customs, for the Respondents

© CROWN COPYRIGHT 2002

DECISION

Robert Bence appeals against the decision of the Commissioners to refuse to return to him a motor vehicle number L771 KTF seized by officers of Customs and Excise on 15 June 2001.

The Appellant represented himself at the hearing of this appeal. The Commissioners were represented by Mr J Hyam of counsel.

The basic facts of the matter are not in dispute. On 15 June 2001 the Appellant was travelling in a Citreon Xantia motor car registration number L771 KTF, in company with a Mr Matthew Coathude. They were stopped in the UK Control Zone of Coquelles, between 8.00pm and 9.00pm at night. They were asked questions. They said they had been to Calais, for shopping, that they had purchased tobacco, cigarettes and wine, and Mr Coathude said that they had 20 packets of tobacco. There was at one stage uncertainty about the way in which the amount of tobacco was described, which was later clarified in evidence. According to the officers, the Appellant also confirmed that he was aware that it was illegal to import drugs, firearms or indecent material. Thereupon a "commerciality statement" was read out by the officers to Mr Bence and Mr Coathude. Mr Bence said that the goods belonged to him and that he had paid for the whole lot. They had cost about £420. No one had assisted him with finance for the goods. In answer to the question "do you expect to received money or favours for the goods?" he replied "my brother will pay back what I give him". He said that six or seven packets would be for his own consumption and the rest would go to his brother and his father. He said that he was not aware of Customs guidance levels on the importation of customs goods as he had been told that he could bring back as much as he could carry. He had not seen Customs Notice No.1. He was asked whether he knew that it was an offence to sell imported excise goods without first paying the duty and replied yes. He was asked whether he knew that excise goods were liable to duty and answered yes. He said that this was his first trip of this kind. He said that Matthew Coathude had paid for the ticket and he had paid for the diesel. The interview was recorded by an officer of Customs and Excise, Mr A Oatham, and signed as true by the Appellant. The officer then recorded his reasons for seizure which were:

- eight times over the guidance levels

- its not for own use, receiving money

- not for your own personal use

An asterisk was added and the mention was added "multiple brands" and "misdeclared HRT quantity".

The Appellant was then handed a seizure information form and a form headed "seizure of vehicle" which stated that the vehicle had been seized under section 139 of the Customs and Excise Management Act 1979 and which included the following printed statements:

"* The hire vehicle will be released to the hire company.

* Vehicle restoration subject to enquiry.

* Vehicle will not be restored.

It also contained the statement:

"Customs and Excise will retain this vehicle for 30 days from the date of this notice.

At the end of the 30 day period the vehicle will be disposed of or destroyed unless communication is received from the owner".

The goods seized were shown as 10 kilos Golden Virginia tobacco, 12 litres lager, ½ kilo of Drum tobacco, ½ kilo of Old Holborn tobacco and a quantity of wine described in the statement of case as 33.75 litres and in a letter from the Appellant's solicitors as 30 bottles.

On 16 June 2001, that is to say the following day, the Appellant's solicitors wrote to the Commissioners asking them to treat their letter as an application for restoration. The letter states that it appears that the Appellant acted naively but unintentionally and had been innocently misled by friends who had told him that he was allowed to purchase as much as he wished. The letter contains the following final substantive paragraphs:

"We very much hope that in the circumstances this case will be regarded as an appropriate case for restoration of the vehicle, although our client has no illusions that there will be some expense falling upon him by way of a restoration fee".

On 29 June 2001 Mr A Hill, team leader at the Eastern Car Terminal office of HM Customs and Excise in Dover replied stating that he had considered all the factors in this case and recommended that the vehicle on this occasion be not offered for restoration for the following reasons:

"1. Your client was carrying Excise goods in excess of the Guidelines as per Article 5 of the Excise Duties (Personal Reliefs) Order 1992.

2. Your client was expecting to receive payment for part of the goods.

3. He had knowledge of the law.

The department's efforts are directed towards deterring and detecting fraud, failure to pay excise duty that is due, irregularities and to encouraging compliance with procedures established to control movement of excise goods. The Customs and Excise Management Act 1979 – CEMA section 141(1) provides that:

"(a) any ship, aircraft, vehicle, animal, container (including any article of passengers' baggage) or other thing whatsoever which has been used for the carriage, handling, deposit or concealment of the thing so liable to forfeiture, either at a time when it was so liable or for the purposes of the commission of the offence for which it later became so liable; and

(b) any other thing mixed, packed or found with the thing so liable, shall also be liable to forfeiture"

There are no exceptional circumstances in this case which would justify a departure from this policy.

If you wish to have the decision not to restore the vehicle reviewed, please write to the following address …

All reviews are impartially carried out by the Review Officer.

You have 45 days from the date of this letter to ask for a review to be conducted.

Please find enclosed Notice 990 for your information …".

On 2 July 2001 the Appellant's solicitors replied and asked for a departmental review. The letter states that the Appellant accepted that he was carrying excise goods in excess of article 5 of the Guidelines. He was unaware of the limits that applied. He was somewhat naïve in as much as he thought that it would be permissible for him to purchase tobacco on behalf of friends who would do no more than reimburse him his outlay. There was no intention to trade or make a profit on any of the items that he brought in. It had been said that the Appellant had knowledge of the law. He was an unsophisticated man who was a van driver by trade. The absence of the vehicle was causing him considerable hardship. He was a man of good character.

On 17 July 2001 the Commissioners replied stating that the letter had been passed to the Customs and Excise review team. The letter had been received on 3 July 2001 and the department had a maximum of 45 days from that date to conduct the formal review. If nothing had been heard from the review officer by the due date it could be assumed that the department's original decision was upheld.

The Appellant's solicitors replied and asked for a number of matters to be taken into consideration. The first was that there was no legal restriction on the amount of cigarettes and tobacco that could be brought into the country from a Member State by a British citizen. There were guidelines setting out the limitations which were understood to have no legal standing. Mr Bence was not importing tobacco for resale. He was purchasing tobacco for himself, friends and family and was doing so on the basis of a shared budget with no profit. The seizure of the tobacco let alone the impounding of a motor vehicle was a breach of law and a breach of justice as Customs officers in such cases were not only investigators but also the tribunal. There were mitigating circumstances, first that Mr Bence was by no means worldly wise. This was his first trip ever to Calais in his own motor car. The seizure of the motor car was quite a traumatic event. The Appellant was not a wealthy man and had been unable to purchase a motor vehicle of similar worth. He was in urgent need of a reliable vehicle as he had commitments which involved taking his elderly mother to various appointments and chauffeuring his autistic brother.

The history of the matter is not in dispute.

The Appellant gave evidence on his own behalf. He confirmed that he had never driven abroad before. The purpose of the trip was to do some shopping. There was no warning about the amounts that one could purchase. When asked how much he had in the way of tobacco he replied "twenty" meaning twenty packets of ten not twenty pouches. He explained that when Mr Coathude had referred to "Phil"at the interview, that was what Mr Coathude called him although in fact Phil was the Appellant's brother's name.

He further said that the car he had taken was one that he had just sold. The buyer had allowed him to keep it for that trip. He had not thought of informing the Commissioners of this at the time. He had another car, a Mercedes, but it had no capacity for carrying goods. The tobacco was in part for him, in part for his brother and in part for his father. The wine was Mr Coathude's, all but six bottles which were for him. He had told his father and his brother that he was going to make the trip to Calais, said that he would get some tobacco. They could reimburse him when he got home. If they did not want it he would keep it. He had some tobacco which was intended for a neighbour as a gift because this neighbour had looked after his house when he went on holiday. He did not tell the officer about that. He maintained that what he had declared was 20 packs of tobacco, meaning 20 boxes of ten pouches. Actually he had 23 packs. There had been confusion in the use of the name Phil. Mr Coathude called him Phil. He did not mean his brother.

The Appellant was asked how it was that the letter of 2 July 2001 from his solicitors said that he thought it would be permissible for him to purchase tobacco on behalf of friends who would do no more than reimburse him his outlay, when in fact he was buying it for family. He said that he could not afford a solicitor but his girlfriend who worked for this firm of solicitors had arranged for the letter to be written. He had never heard of the "use it and lose it" policy operated by the Commissioners in regard to the seizure of cars. He had never seen any leaflet about it. He saw no signs about it at the terminal. He had no idea of the possibility of seizure. He did not realise that it was against the law to sell to your family without gain. He had been told of the "Lindsay decision" after the events described.

Evidence for the Commissioners was given by Mr Andrew Oatham, an officer of HM Customs and Excise who had first interviewed the Appellant on 15 June 2001, and had taken the statement of the Appellant. He said that in the record of the statement there was a mistake. He had recorded the Appellant as saying that 6 or 7 pouches of the tobacco were his. It was in fact 6 or 7 packets that is to say packets containing 10 pouches each. He had recorded the reasons for seizing the goods. He had two further reasons for seizing the goods the first that there were multiple brands of tobacco and the second that there was a misdeclaration of the amount by the Appellant.

The witness, in answer to questions by the Tribunal said that the importation was over the guideline limit only in respect of hand-rolling tobacco, nothing else. The reasons for seizing the vehicle were those that he had given at the foot of the statement. As far as misdeclaration by the Appellant was concerned there was in fact 11 kilos of hand-rolling tobacco amounting to 220 pouches and the Appellant had declared 200. He regarded that as a misdeclaration. Also the Appellant had been receiving money for some of the goods. They were therefore not for personal use. The fact of finding multiple brands was important because normally people only smoked one brand and here there were three. To be eight times over the guideline limit with regard to hand-rolling tobacco was not a reason by itself to seize the vehicle. But getting money for some of it was a reason to seize it. The Appellant had said that he would be reimbursed. He would give them to members of his family for reimbursement.

Julia Lamb, an officer of Customs and Excise also gave evidence that on 15 June 2001 just before 9.00pm in the evening she had read a "commerciality statement" to Mr Coathude. That statement included the following passage:

"Relief from payment of UK excise duty is afforded subject to the condition that the goods are not imported or held or used for a commercial purpose. I require you to satisfy me that these have not been imported for a commercial purpose. If you fail to do so then these goods and the vehicle will be seized as liable to forfeiture. You are not under arrest and are free to leave at any time. If you decide to leave before I complete my questions the excise goods, and vehicle, will be seized and must remain here".

Mr Coathude then answered questions, which were recorded by the officer. In answer to the question "who do the goods belong to?" Mr Coathude replied "to Phil". Later he said that he bought the ticket on the net and Phil paid for the fuel.

Asked by the Appellant why Mr Coathude's wine was confiscated the witness said that all goods were packed together regardless of ownership. They were in the same vehicle.

The third witness for the Commissioners was Mr Andrew Hill an officer of Customs and Excise, who had received the request for restoration of the vehicle. His statement was before the Tribunal. He confirmed it. The statement contains the following passage:

"Part of my role as a Senior Officer is to make decisions on the restoration of goods and vehicles. In deciding whether or not to restore the vehicle, Index No. L771 KTF, to Mr Bence, I called for the notebook of the officers concerned. I agreed with the officers that the goods fell outside the scope of the Excise Duties (Personal Reliefs) Order 1992 and were liable to seizure. I took particular note that Mr Bence and his passenger failed to declare, when asked, the full quantity of tobacco they had in their possession. Mr Bence was aware it was an offence to sell imported excise goods without first paying the duty. Part of the goods being imported by Mr Bence, were not for his own personal use, and he was to receive money for them. Section 141 of CEMA 1979 provides that any vehicle used for the carriage of goods which are liable to forfeiture shall also become liable to forfeiture. I consider the Commissioners policy on vehicle restoration. In circumstances such as these the Commissioners policy is that vehicles used to transport these goods should not be restored. Having seen no exceptional circumstances that this policy should not be applied, I refused restoration by letter dated 29 June 2001."

In reply to questions the witness said that in taking his decision it was in his mind that both notebooks of interview contained the fact that there was a failure to declare the full quantity imported. He gathered from the notebooks that the Appellant had declared 20 pouches of tobacco, but that he was in fact importing 22 packets containing 20 pouches. The Appellant was aware that it was an offence to sell goods without paying duty. Part of the goods were not for own use. The reasons for refusal to restore were given in his letter of 29 June 2001. He said in evidence that the Appellant "obviously had knowledge of the law about sale or resale of excise goods and these goods were liable to duty". He accepted as a possible explanation that the goods were purchased in part for the Appellant's brother and father. Initially he thought that only 20 pouches were declared. That was a misapprehension. Asked about the authenticity of the Appellant's explanation he said that no one had antecedents until they were caught, there was always a first time. The policy dealt with first time offences. It was for an individual going abroad to find out about the law. There had been plenty of publicity about the Commissioners' policies. One could obtain advice. He did consider the question of a restitution fee but the policy was non-restitution. The value of the goods was £1,100 and the value of the vehicle was very close to that.

The witness referred to a witness statement of Mr Gerry Dolan, an officer of Customs and Excise, which appeared in the Commissioners' bundle and which sets out the Commissioners' policy. The statement referred to a leaflet setting out the guidelines for amounts of tobacco and alcohol regarded as reasonable for personal use, and the need to convince an officer of no commercial intent if these were exceeded and the penalties if caught smuggling. He did not have the leaflet available. The leaflet was available in the terminal building at Dover.

The witness confirmed to the Tribunal textually that initially he was under the impression that the travellers declared 1 kilo of tobacco and there were 11 kilos in the vehicle. It was after his decision that he found out that he was wrong but even so there was still a misdeclaration. Asked whether there was not a difference in degree in declaring 1 kilo when 11 kilos were in the vehicle or 10 kilos when 11 kilos were in the vehicle the witness said that there was still a failure to declare the full amount and there was still the question of commerciality. He thought that the Appellant was going to sell the goods. He thought that he was not just going to sell the goods to his relatives.

Mr Raymond Payne, a senior officer of HM Customs and Excise currently employed as a review officer gave evidence that on 14 December 2001 he completed a review of the case involving the Appellant, who notified a requirement to conduct a review of a decision refusing to restore a seized vehicle. However the Commissioners were unable to carry out the review within the 45 days deadline specified in section 15 paragraph (2)(b) of the Finance Act 1994. Thus the decision not to restore the vehicle was deemed upheld. He subsequently did carry out a review, and informed the Appellant by letter dated 14 December 2001. He was satisfied that the decision not to offer restoration was correct and reasonable. He was satisfied that he considered every matter which was relevant and disregarded everything that was irrelevant.

He explained that this was a "shadow review" to give information and to show the Commissioners case. He was aware at the time that there was an appeal. He considered the mitigating circumstances. However the policy was to apply even on a first offence. He considered the argument about this being a first offence and about the Appellant's personal circumstances. As the Appellant had some savings there was not so much hardship on him.

Asked about the interviewing officer's misapprehension about the quantities declared the witness said that he based his reasons on the officer's notebook. It was not clear whether at the time the disclosure was for 20 packets or 20 pouches but there was still an underdeclaration. He considered it important that there were three brands of tobacco which indicated that the tobacco was not for own use. Even if it was not as large an underdeclaration as first thought it was still an underdeclaration.

In answer to questions he said that he was told that the vehicle had been sold. The sale was after the solicitors had asked for the Commissioners to hold on to the car. He could not comment on the circumstances. After 30 days if there was no communication from the owner the car was forfeited to the Crown and the Crown could sell it as soon as possible because of storage costs. He said that the computer was notified that the matter was under appeal but there was a delay in issuing the review letter which might have meant that the car was sold before the appeal. Asked whether the solicitor had not asked for the vehicle to be returned within 7 days he replied that after forfeiture the vehicle was the Commissioners' property. Someone should have put a hold on the vehicle but he understood that it had already been destroyed.

There is no dispute between the parties about the provisions of law which apply to this appeal and the circumstances under which it arises.

The Channel Tunnel (Alcoholic Liquor and Tobacco Products) Order 2000 and the Excise Goods (Personal Reliefs) Order 1992 apply to this appeal. Under that latter Order a community traveller, and the Appellant is such, has relief from excise duty on excise goods which he has obtained for his own use and which he has transported himself. However that relief is subject to the condition that the goods are not held or used for a commercial purpose. If they are, they are liable to forfeiture. In deciding whether or not that condition has been complied with regard must be had to the reasons for the traveller having possession of those goods, whether he is a revenue trader, his conduct in relation to those goods, the location of the goods, the mode of transport used to convey the goods, any documents relating to them, the nature of the goods, the quantity of the goods, whether he has personally financed the purchase and any other relevant circumstances.

The Commissioners may require a person importing goods to satisfy them that these goods are not being held or used for a commercial purpose. Where a person fails to satisfy the Commissioners of that then the condition that they are not held for a commercial purpose shall be treated as not complied with. This last condition applies to people who have in their possession excise goods in excess of any of the quantities shown in the schedule. In relation to this case, the relevant quantity is 1 kg of tobacco products other than cigarettes or cigars.

It is further not in dispute that under section 49 of the Customs and Excise Management Act 1979 chargeable goods brought in without payment of duty are liable to forfeiture and that under section 141 of the Customs and Excise Management Act 1979 any vehicle which has been used for the carriage of a thing liable to forfeiture shall also be liable to forfeiture. Schedule 3 of that Act provides that the Commissioners should give notice of seizure of any thing liable to forfeiture to the owner thereof, and that any person claiming that any thing seized as liable to forfeiture is not liable shall within one month of the date of seizure give notice of his claim in writing to the Commissioners. If at the expiry of that period no such notice has been given the thing in question shall be deemed to have been condemned as forfeit.

Section 152 of the Act provides that the Commissioners may restore subject to any conditions as they think proper any thing forfeited.

The review and appeal procedure are set out in sections 15 and 16 of the Finance Act 1994. Section 15 requires the Commissioners to undertake a review of their decision when asked to do so, and section 16 provides for a right of appeal to this Tribunal. Section 15 provides that where the Commissioners do not make a review within the 45 days specified the original decision shall be deemed to be confirmed.

Section 16 provides :

"(1) Subject to the following provisions of this section, an appeal shall lie to an appeal tribunal with respect to any of the following decisions, that is to say –

(a) any decision of the commissioners on a review under section 15 above (including a deemed confirmation under subsection (2) of that section); …

(4) In relation to any decision as to an ancillary matter when a decision on review of such a decision, the powers of an appeal tribunal on an appeal under this section shall be confined to a power, where the tribunal are satisfied that the commissioners or other person making that decision could not reasonably arrive at it, to do one or more than the following things that is to say –

(a) to direct that the decision, insofar as it remains in force, is to cease to have effect from such time as the tribunal may direct;

(b) to require the commissioners to conduct, in accordance with the directions of the tribunal, a further review of the original decision; and

(c) in the case of a decision which has already been acted on or taking effect and cannot be remedied by a further review, to declare the decision to have been unreasonable and to give directions to the commissioners as to the steps to be taken for securing the repetitions of the unreasonableness do not recur when comparable circumstances arise in the future".

It is the Appellant's case that the Commissioners' decision to refuse to restore was unreasonable, taking into account that this was in essence a shopping trip to buy goods for the Appellant and his brother and father, and to make a present to a neighbour, that there was therefore no intention or evidence of commerciality, and the fact that the Appellant's father and brother might reimburse the Appellant for any goods they took did not make the importation a commercial one.

The Commissioners however say that their decision not to offer the vehicle for restoration is reasonable. They have a policy of not restoring seized vehicles except in exceptional circumstances. There were no exceptional circumstances in this case. The policy was designed to protect legitimate trade in the United Kingdom. The Appellant had failed to declare the true quantity of tobacco in their possession, and the imported goods were not solely for the travellers' own purpose. As there were no exceptional circumstances their decision not to restore the vehicle was reasonable and one which they were entitle to take.

Although there is no dispute about the facts which led up to the seizure of the goods in question and of the Appellant's vehicle, the evidence before the Tribunal has nevertheless disclosed matters which go to the reasonableness of the Commissioners' decision.

Before considering these it is necessary for the Tribunal to say that the matter under appeal is the deemed upholding on review of the decision not to restore the vehicle taken by Mr Hill on 29 June 2001. That is because the Commissioners did not carry out a review within the 45 days allowed to them. The fact that the reviewing officer subsequently carried out a review and has justified the decision not to restore is not a matter which can go to the detriment of the Appellant. The Commissioners had their chance to make a review and to justify their decision if they so wished, on review, within the time limits specified and they have not done so. In the result there is a deemed refusal. The Tribunal cannot consider the review letter out of time as being the decision under appeal, although no doubt the Commissioners can make the arguments advanced therein part of their case.

It is not in dispute that the Appellant's car was destroyed while the request for its return was pending. The Tribunal understands the problem of storing forfeited vehicles and goods, but does not see how the Commissioners can, while a question is pending, and while they have a statutory duty to consider it, put it out of their power to exercise one of the options which that statutory duty includes, that is to say the restoration of the vehicle. It is irrelevant in these circumstances to say that condemnation proceedings could have been bought in regard to the legality of the seizure. These proceedings concern the reasonableness of the Commissioners' decision not to restore a vehicle, when they had in fact put it out of their own power to restore it.

The main ground on which the Commissioners took their decision first to seize and then not to restore was the quantity of goods that is to say of hand-rolling tobacco imported. That is rightly so because paragraphs 3(A) to 3(C) of the Excise Duties (Personal Reliefs) Order 1992 specifically apply to persons who have in their possession or control excise goods in excess of the quantities shown in the schedule to the Order.

The reasons for the original seizure were:

"- eight times over the guidance level

- its not for own use, receiving money

- not for your own personal use".

The grounds given for the last of these conclusions were:

"Multiple brands

Misdeclared HRT quantity.

The reasons for the decision not to restore set out in the letter of 29 June 2001, deemed upheld on review were:

"Your client was carrying excise goods in excess of the guidelines as per article 5 of the Excise Duties (Personal Reliefs) Order 1992.

Your client was expecting to receive payment for part of the goods.

He had knowledge of the law".

The letter also referred to the department's policy towards deterring and detecting fraud and failure to pay excise duty, and to the right to forfeit vehicles used in the circumstances and said that there were no exceptional circumstances in this case which would justify departure from this policy.

The Commissioners say in their statement of case that they considered the application of their policy of non-restoration and that there were no exceptional circumstances so that it was reasonable to apply that policy and it was not disproportionate so to refuse. They further say in their contentions at para 43(c) of the statement of case:

"(c) The Appellant failed to declare the true quantity of tobacco in their possession, when initially questioned the passenger replied they had 20 packets of tobacco but it was established that they were in fact 220 pouches (11 kgs) of tobacco in the vehicle.

(d) The imported excise goods were not for own purpose.

(e) The Commissioners' policy that private vehicle used for the improper importation of excise goods are not restored, even on the first occasion that they are so used."

It is for the Appellant to show that the Commissioners' decision was one which no reasonable body of commissioners could take.

Reasonableness has been defined in this context in a number of previous decisions not least that of Bowd v Customs and Excise Commissioners (1995) V&DR 212 as being a requirement to show that the Commissioners failed to take account some matter to which they should have given relevance, or to take into account some matter which they should not have taken into account or made some other mistake of law, referred to as "Wednesbury reasonableness."

The Tribunal considers the position of the Commissioners as shown in the evidence before it in that light. The first thing that requires to be said is that the Commissioners have acted throughout since the date of seizure of this vehicle on a misapprehension of fact. They took the answer "20 packets" given by the Appellant's passenger to the question "how much [tobacco or cigarettes] have you got? to mean that 1 kilo was being declared. It is now clear that what was being declared was 10 kilos. It is also clear that what was being imported was 11 kilos. The Commissioners say, and maintain, that whether 1 kilo was declared out of 11 kilos to be imported or 10 kilos were declared out of 11 to be imported, there was an underdeclaration, justifying their decision. They do not seek to make any relation of proportionality between these two declarations. They do not accept that there is an innocent explanation and proceed on the basis that there is no difference at all about whether the Appellant and his passenger in fact substantially declared what they were importing or substantially underdeclared what they were importing. It does not seem to the Tribunal that any reasonable person would proceed on the basis that a substantially false declaration and a substantially true declaration were the same thing.

The Tribunal sees that at the interview the question was asked "are you aware its illegal to import drugs, firearms or indecent material"? Mr Coathude replied `yes'. That answer is relied on by Mr Payne as part of the background matter to which he referred in his letter of 14 December 2001. Insofar as that letter is part of the Commissioners' case, the Tribunal is bound to say that it does not see how the fact that somebody is aware that it is illegal to import drugs, firearms or indecent material can be relevant to this appeal or how that answer can in some way go to the Appellant's detriment. However, the matter was not put to the interviewing officer and the Tribunal does not place any reliance on it. It is only relevant to one of the grounds for refusal to restore giving by the Commissioners, that the Appellant had knowledge of the law. That presumably also relates to the Appellant's affirmative answers to the questions "do you know its an offence to sell imported excise goods without paying the duty"? and "do you know excise goods are liable to duty"? The Commissioners rely on the allegation "he had knowledge of the law" for not restoring the vehicle. The Tribunal understands this position to mean that as the Appellant had some knowledge of the law he could not have been importing goods innocently. However that conclusion has to be placed against the undoubted fact that the Personal Reliefs Order does give a right to import subject to conditions, so that to say that one knows that certain actions may be offences does not imply that one is knowingly infringing the conditions.

The Commissioners main ground is that the Appellant was carrying excise goods in excess of the guidelines. That much is admitted. It is not of itself of course a reason for seizing the vehicle or for not restoring it. It is perfectly legitimate to import goods in excise of the guidelines limits, if the conditions imposed are satisfied.

The next consideration upon which the Commissioners acted was that the Appellant was to receive payment for part of the goods. There is no question that what was in the Appellant's mind was that a small part of the goods were to be used as a gift but that some were to be offered to his father and brother in return for reimbursement. That is not of course a commercial transaction in the pure sense of the purchase of goods for resale. The matter has been exhaustively considered in the appeal of Lindsay v Customs and Excise Commissioners (2002) 3 All ER 118, to which the Tribunal was referred.

That decision of 19 February 2002 is subsequent to the seizure, subsequent to the notice of appeal, and subsequent even to Mr Payne's letter of 14 December 2001, but before the hearing of this appeal. Nevertheless the Tribunal's attention was drawn to it and the Tribunal finds relevant the distinction drawn at page 125 of the judgment of Lord Phillips in the following terms:

"Thus the directive makes express provision for products acquired by private individuals for their own use and for products which are held for a commercial purpose. The directive does not expressly provide for the case of the private individual who buys goods on behalf of others but not in circumstances which would naturally be described as being "for a commercial purpose". An example is the holidaymaker who purchases some cigarettes for and at the request of a relative who has provided him with the purchase money. … So far as the 1992 Order is concerned, I cannot accept that a holidaymaker who is bringing back some cigarettes for his sister, in anticipation that she will reimburse him the purchase price, can properly be said to be holding the cigarettes "for a commercial purpose". The holidaymaker will be liable to pay duty on the cigarettes by reason of the provisions of the Tobacco Products Duty Act 1979. He will not be entitled to relief because he has not obtained the cigarettes for his own use. It does violence to the English language, however, to say that he is holding the "goods for a commercial purpose".

The sole issue in this case is whether the decision of the Commissioners to refuse to restore the vehicle to Mr Bence can stand, considered in the light of the considerations which the Tribunal must take into account under section 16 of the Finance Act 1994, that is to say whether the decision was one which no reasonable body of Commissioners could reach.

It was no doubt reasonable for the Commissioners to consider that the importation of the tobacco was not for the Appellant's own personal use, and to accept that he was to obtain reimbursement from his brother and father. The Tribunal doubts whether the plain statement that the Appellant was carrying excise goods in excess of the guidelines in article 5 of the Personal Reliefs Order was a reasonable justification for the refusal to restore taken by itself. It further doubts whether it was reasonable to say that because the Appellant had answered two questions about offences affirmatively he could be said to have "knowledge of the law" and to conclude that this fact could be advanced as a justification for the refusal to restore.

The Tribunal accepts that the Commissioners are obliged to have a policy for deterring illicit activities, and that in view of the size of the problem they are entitled to have a robust policy, including seizure. They are also entitled to have a policy on the restoration of vehicles. However they must exercise their powers in regard to restoration subject to their obligation of reasonableness in the way in which that term is set out in the legislation and in the interpretative case law. It was in the Tribunal's view perfectly unreasonable for them to proceed on an erroneous basis of fact and having discovered that error, to continue as though nothing had changed.

It would also have been unreasonable in the light of the decision in "Lindsay" for the Commissioners not to consider the decision not to restore in the light of the reasoning applicable to a shopping trip for members of the family. However, they did not have the benefit of that decision at the time, and could not be obliged to apply its reasoning.

There is a problem in this case about the destruction of the vehicle while the Commissioners were under a duty to consider its restoration. However that is not the matter under appeal, the matter under appeal being in accordance with the limitations placed on the Tribunal's jurisdiction, only the reasonableness of the Commissioners' decision to refuse to restore it.

The Tribunal finds that that decision was unreasonable, and that it cannot stand, and that therefore this appeal must be allowed and that in accordance with its powers under section 16 of the Finance Act 1994 the Tribunal being satisfied that the Commissioners could not reasonably have arrived at the decision under appeal directs that the decision is to cease to have effect from the date of release of this decision and that the Commissioners conduct a further review of the original decision, taking into account the facts before them, namely that the Appellant substantially declared the amount of goods which he was proposing to bring into the country.

PAUL HEIM CMG

CHAIRMAN

RELEASED: 13 November 2002

LON/8147-BENC.HEIM